ISLAMABAD: The task force on gas-related issues is expected to address the delayed implementation of the amended Exploration and Production (E&P) Policy 2002 in a critical meeting today (Wednesday), chaired by Deputy Prime Minister Ishaq Dar.
The amended policy, approved by the Council of Common Interests (CCI) on January 26, 2024, allows E&P companies to sell 35% of gas from new discoveries to private sector firms at competitive prices, with the remaining 65% allocated to state-owned Sui Southern and Sui Northern gas companies. The implementation framework, however, has been stalled for over eight months, preventing a potential $5 billion investment in exploration and production activities.
The Petroleum Division will present the long-awaited framework during today’s meeting, which aims to unlock investment aimed at reducing reliance on imported fuel by boosting domestic gas production. The task force, having failed to resolve the issue in its previous four sessions, appears poised to take decisive action, as key stakeholders, including Minister for Petroleum Musadik Malik, have returned to address the issue.
The Petroleum Division has revised its previous recommendation of a phased implementation of the 35% private sector gas allocation until 2030. It now suggests that E&P companies first recover depleted gas volumes from existing wells before diverting 35% of additional production to private sector buyers. A benchmark mechanism for pricing and allocation is under consideration, with concerns about maintaining a level playing field for the regulated Sui gas companies, which currently face liquidity issues due to unpaid dues amounting to Rs1,500 billion.
The amended policy aims to improve the financial situation of E&P companies by allowing them to secure advance payments from private buyers, facilitating further exploration and production efforts.
Story by Khalid Mustafa
